Karunatilake and Secretary, Department of Social Services (Social services second review)

This matter concerned an appeal to the Administrative Appeals Tribunal (AAT) regarding the rate of Age Pension paid to the applicant. The applicant had been granted Age Pension in March 2016. In 2003, he and his wife jointly purchased a property, each holding a 50% interest. Following their separation in 2004, the applicant continued to reside in the property until February 2016. On 30 November 2017, the applicant transferred his 50% share of the property to his estranged wife for zero dollars, describing it as a gift. Subsequently, his son informed Services Australia of this transfer and provided information regarding the applicant's other assets. Services Australia decided to reduce the applicant's Age Pension rate, deeming the transferred property interest a "deprived asset" and calculating deemed income from it. An Authorised Review Officer (ARO) affirmed this decision, and the applicant sought review by the AAT.

The primary legal issues before the AAT were whether the applicant's 50% interest in the Willetton property constituted a "deprived asset" under the *Social Security Act 1991* (Cth) and, consequently, whether the reduction in his Age Pension rate was correctly calculated based on deemed income from this asset. The applicant's grounds for appeal included a challenge to the tribunal's finding regarding his capacity to enter legal agreements and a dispute over the circumstances of his residence in the property prior to its transfer.

The Tribunal applied the provisions of the *Social Security Act 1991* and the *Social Security (Administration) Act 1999* (Cth), as well as relevant policy guidance from the Social Security Guide. The Tribunal affirmed that an asset is considered "deprived" if it has been disposed of and its value is included in the person's assets under specific sections of the Act. The Act defines an asset broadly, and a "financial asset" includes a "deprived asset." Income is defined as an amount earned, derived, or received for a person's own use or benefit, with ordinary income including amounts derived from any source. The Act also provides for the deeming of income from financial assets, where a person is taken to receive ordinary income in accordance with specified rates and thresholds. The Tribunal found that the applicant held a legal interest in the property until he transferred his 50% share as a gift. This transfer was considered a disposal of assets, and the applicant's rate of Age Pension was correctly reduced under section 79 of the Administration Act due to the change in his deemed fortnightly income.

The Tribunal affirmed the decision of the Social Services & Child Support Division of the Administrative Appeals Tribunal, which had in turn affirmed the decision of the ARO regarding the applicant's Age Pension.